Time for a new online financial model

I have written several posts arguing that online content is not free and the present approach is not sustainable. The argument regarding the false perception of free is that even if you are not paying for online content with cash the online sites are harvesting your information to be sold to interested parties. Information about you is used to manipulate you in one way or another. Someone will pay. The most recent example of someone will pay might be the use of information about users to tailor the political information they received during the 2016 election.

I also believe that free is not sustainable. Quality content (information created to be factually accurate and semi-independent) takes time and skill to develop. How many individuals is it reasonable to assume will provide such content as a hobby? How many of the online services we use could possibly provide such content if the online service had means of support. I suggest both content creators and content hosts must have some means of compensation.

Those with commercial interests are already forcing our expectations of free to be reconsidered. I recently wrote a post describing the soon to be realized plans for upgrades to Chrome (Google) and Safari (Apple). Google promises to block the most onerous ads (pop-ups, video/audio that plays automatically). Apple promises to block all ads AND block cross-site tracking. These companies are taking these steps to protect their own interests. Google makes a high percentage of its income from ads and hopes encouraging higher quality ads will sustain the ad-based content model. Apple has no stake in ads at all and hopes to take advantage of customer annoyance with ads to prioritize their browser and hardware. Whatever the other issues with ads and ad-blockers, companies will take advantage of the situation to limit the value of online ads to content creators and other technology companies. This combination of the long-term value of quality and the willingness of technology companies to find some type of leverage will kill the present funding opportunities.

As an example, check about half-way down in the left-hand column of this blog. You might see the following message:

No ad blocker detected. Thanks for your support.

I run code that detects whether a viewer has an ad blocker installed and returns the message if no blocker is detected. Instead of this message, I could run a short javascript script that sends the viewer to another page that asks the viewer to disable ad blocking. Instead, I just track the data on the percentage of viewers who use ad blocking software (about 18%).

My prediction is that quality information will go the way of streaming music. I would describe this as micro-payments and many of us already accept such a system to listen to music (I pay for Google and Apple music subscriptions). Google music, for example, also allows me to view YouTube content without ads (YouTube Red).

Here is a new approach you will likely learn about soon if you have not already given it a try. Brave is a new project providing a great browser that can be used in three ways – as a traditional browser, as an ad blocking browser, or as a micro-payment browser. As I understand the micro-payment model, users commit a certain amount of money for a month – say $4. Brave will track the sites the user visits for the month and divide up the $4 payment among those sites that have signed up to be paid (described as claiming your share).

I believe there are significant scale-up issues, but here is how this might go. If Brave can get enough individuals to get the system started (pay in a few dollars so that content creators see a return), I predict Brave will offer producers the opportunity to block nonparticipants. It is not difficult to block a given browser or deny access to users employing ad blockers. There will likely continue to be battles between those wanting to block ads and those wanting to block ad blocking. If Brave makes the move I predict, I might decide as a content creator that is it better to have 10 readers paying one cent per view than 100 readers who block my ads or if the revenue from displaying ads seldom results in any income because no viewers click on the ads. There are a lot of ifs in my analysis, but I do think what I describe is possible and I think it makes enough sense that some will give it a try. The micropayment approach ended up winning the music wars because even though some access was free, playing just what you wanted to hear was attractive enough to generate payment.

Whatever you think, take a look at the Brave browser. It is very fast and just an interesting alternative. I am considering throwing in a few bucks a month and possibly enrolling my content as a participant just to see what happens. It appears to be easy to get in and to get out.

I do have one suggestion for Brave. I think more folks would trust your motives if you did not include the “no ads” option. As I understand the argument you make, publishers should be compensated. The argument would be stronger if the options available were limited to a) ads as intended by the publisher and b) the reader-funded mode with no ads.

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